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The Almighty Buck Crime United States

$6 Trillion In Fake US Treasury Bonds Seized In Switzerland 199

Posted by timothy
from the that's-ok-the-official-ones-are-fake-too dept.
ackthpt writes "If you're going to steal, steal big, right? Italian anti-mafia prosecutors have announced the seizure of $6 trillion of allegedly fake U.S. Treasury bonds, an amount that's almost half of the U.S.'s public debt. The probe focusing upon money laundering has also include financial dealings alleged to direct money to Nigerian sources to buy plutonium. Sound like a movie plot, yet? $6 Trillion, that's a lot of lettuce."
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$6 Trillion In Fake US Treasury Bonds Seized In Switzerland

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  • Please clue me in. (Score:4, Interesting)

    by grub (11606) <slashdot@grub.net> on Saturday February 18, 2012 @01:01AM (#39083121) Homepage Journal

    The U.S. embassy in Rome has examined the securities dated 1934, which had a nominal value of $1 billion apiece, they said in the statement.

    I'm admittedly not a financial/bonds guy, but wouldn't $1 billion securities raise some eyebrows? In the same way that trying to pay for a Slurpee with a $1000 bill would.
    • by Sycraft-fu (314770) on Saturday February 18, 2012 @01:09AM (#39083151)

      Crooks come up with stupid plans all the time, and often let their own greed blind their judgement. Hell look at some of the people who scam the 419 scammers. The 419 scammers are counting on people's greed to overwhelm their good sense, and then fall victim to the same thing.

      Indeed such a thing would almost certainly raise eyebrows but the crooks likely didn't think it through.

    • by Shavano (2541114)

      I'm sure they were thinking they'd only have to sell one at a steep discount to be fabulously rich the rest of their lives.

    • by superwiz (655733) on Saturday February 18, 2012 @01:24AM (#39083231) Journal
      Generally, no. Bonds are issued in fairly large denominations. But in this case, it would raise eyebrows because of the date. $1billion dollar bond would not be issued in 1934. No financial institution would have lent money in such one large chunk against 1 financial paper. Today bonds are issued in at least 100 million issues, but as someone pointed out, today they are registered, so it doesn't matter what the original issue is.
      • However, just 10 years earlier in 1924 the Germans, who live next door to Switzerland, experienced hyperinflation [wikipedia.org]. This got so bad that they had to change currencies and literally remove 12 zeros from the old one. Maybe the counterfeiter got his 2's and 3's mixed up?
        • And a hyperinflation in Germany would affect the face value of US Treasury bonds exactly how?
          • by azalin (67640)

            And a hyperinflation in Germany would affect the face value of US Treasury bonds exactly how?

            Well it paved the ground for this guy who stole Charlie Chaplins beard and his pals. They later engaged in a little tour across europe that indeed did affect the US economy. But beyond that, probably not much.

        • by Anonymous Coward on Saturday February 18, 2012 @08:51AM (#39084745)

          However, just 10 years earlier in 1924 the Germans, who live next door to Switzerland, experienced hyperinflation [wikipedia.org]. This got so bad that they had to change currencies and literally remove 12 zeros from the old one. Maybe the counterfeiter got his 2's and 3's mixed up?

          The German reichsmark was issued in both metal coins and as paper. Already during WWI the real world value of these different forms of payment began to diverge. The German hyperinflation only affected ther paper money (papiermark) - bonds sold abroad were denominated in goldmark and as such stable.

          the hyperinflation ended with introduction of the rentenmark - which by a fairly complex scheme was looking as much like a gold currency as a currency can do without being backed by gold (rentenmark could be exchanged for bonds that paid the papiermark value of one goldmark at maturity) and was trading 1:1 with goldmark. As prices stabilized the rentenmark was converted 1:1 into the new reichsmark.

          The goldmark was never affected by all these shenanigans and during the peroid of hyperinflation big business transactions were often conducted in goldmark (or foreign currencies).

      • Can anyone comment on the infamous "bearer bonds" which Hollywood and movie bank robbers are so fond of?

        • Re:Bearer bonds (Score:5, Informative)

          by um... Lucas (13147) on Saturday February 18, 2012 @08:19AM (#39084665) Homepage Journal

          Wiki it

          Short story is that bearer bonds pay to the bearer of them. There's no tracking of ownership. If you bought the bond and I stole it from you, you can't call the issuer to have them void that bond and issue a replacement. So literally, the bearer of the bond is the one who gets paid. Contrast that with a stock certificate - you have it, but the company knows who has them as well, or at least the transfer agent does. I steal your certificate, and you report it stolen to the transfer agent, and they void the old one in their records and issue a replacement to me.

          The us government stopped issuing them in the 80s, I believe.

        • Lucas is right, but there is another twist.

          Bearer bonds would 1. have a face value (Maybe $1000) and 2. coupons ($50 per year ).

          As the coupon and/or bond came due you could take them in the bank, clip the coupons, and hand them over to the bank. The bank would then hand you cash and send in the fraudulent bond for remediation. By the time the bank figured out that they had been had, the fraudster would be long gone.

          The Great Gatsby implies that the fortune is from from fraudulent bearer bonds. (The bonds we

    • yeah, $1 billion is a ridiculously high denomination - they'd probably make denominations of a thousand or a few thousand for the high rollers.

    • by VinylRecords (1292374) on Saturday February 18, 2012 @01:41AM (#39083297)

      The plan allegedly was to sell them to developing nations and dupe their governments. The mafia would create a circus theater filled with distractions to make them look like a legitimate outfit. Office space, limousines, fancy suits, lots of showmanship. They'd use foreign diplomats and politicians on their payroll to get presidents or warlords of a foreign country into a face to face meeting.

      They get a leader of some inexperienced government, possibly even a wealthy warlord, of a developing nation, and try to get them to transfer $1 billion worth of wealth in exchange for a $1 billion U.S. treasury bond. It is actually very creative. Had they not been caught they might have been able to pull this off. Though I don't see how any bank would have not raised a million red flags for this transaction and the reports are that the criminals wanted to move the money through Swiss banks.

      This isn't the first treasury bond scam nor will it be the last. Organized crime loves this scam. Every year a few individuals are arrested with fake bonds on them that are valued at billions of dollars. The Italian police found a bunch of fake $1 billion bonds during a routine car stop a few years ago.

      • by Anonymous Coward on Saturday February 18, 2012 @03:47AM (#39083733)

        Banks are greedy motherfuckers, too. I worked for one (big one) doing due diligence. I personally delivered files on unsavory corporate raiders who gutted many companies and left behind ecological disasters that had to be then cleaned up by the EPA on taxpayer dime. But since none of them were ever convicted of anything, the bank smiled politely and opened their accounts.

      • by pz (113803)

        and try to get them to transfer $1 billion worth of wealth in exchange for a $1 billion U.S. treasury bond

        My guess is that they'd try to get them to transfer some lesser amount to make the deal more attractive, say $500 million worth of assets. What despot isn't desparate for more cash?

        • It's a fine line to pick the exact ratio that's believable. If you're offering 10% above market rate, then people will likely just believe that they got a good deal. If you're offering 100% above the market rate, then they'll think that there's something a bit fishy going on. You need to offer a good enough deal that they thing they're getting the better of you, but not such a good one that they become suspicious. This is where most 419 scammers fail: people are far more likely to believe that they can
      • The plan allegedly was to sell them to developing nations and dupe their governments. The mafia would create a circus theater filled with distractions to make them look like a legitimate outfit. Office space, limousines, fancy suits, lots of showmanship. They'd use foreign diplomats and politicians on their payroll to get presidents or warlords of a foreign country into a face to face meeting.

        They get a leader of some inexperienced government, possibly even a wealthy warlord, of a developing nation, and try to get them to transfer $1 billion worth of wealth in exchange for a $1 billion U.S. treasury bond.

        Well, it was a pretty ingenious scheme, but it looks like Obama is going to have to find another way to pay off the U.S. debt...

    • by phantomfive (622387) on Saturday February 18, 2012 @02:17AM (#39083423) Journal
      Here is a story with a picture of the bonds. [bloomberg.com] Kind of cool to look at, even if not real. You are right though, here is a quote from the story:

      Creating fake Treasuries is a “common scam, especially in Italy,” he said. The tipoff was the “astronomical” face value of each bond, he said. Fake bonds in high denominations are more common in Europe, where people are less familiar with the face value of U.S. Treasury bonds than in the U.S., he said.

    • by cvtan (752695)
      If you're going to make a fake bond, why not make 1 bond worth $6 trillion? It would be so much easier to carry.
    • for example, the pension funds and retirement funds of the entire planet were conned into buying CDOs back in 2000-2008. those were essentially 'garbage securities' but everyone was too lazy to actually give a shit until 2008, when the government simply bailed out the crooks for 2 trillion dollars.

      if you slather over a bunch of electronic securities with mathematics and "well spoken men in armani suits", you can pretty much get away with anything.

      so whats the problem with paper securities? exactly what you

    • by NotQuiteReal (608241) on Saturday February 18, 2012 @01:21AM (#39083219) Journal
      Why do the photos have a 50 star flag over the "series 1934" label? The box itself isn't even correct... unless there is some good reason it doesn't have the period correct 48 star flag.
      • by Phat_Tony (661117)
        I'm more interested in why it has 25 stripes.
      • by artor3 (1344997) on Saturday February 18, 2012 @03:56AM (#39083769)

        It's even weirder than that... Here's the highest res shot of the front of the thing that I could find - link [divinecosmos.com]. (Caution -- source website contains industrial grade crazy. Just mousing over the link will get you on at least four watch lists.)

        Zoom in on the flag. It's grainy, but I'll be damned if there aren't eight rows, alternating between 6 and 7 stars each. That's 4 x 13 = 52 stars.

        Personally, I choose to believe that these are boxes sent back from the future year 1934 AA (after apocalypse), by future Americans who live in a 52 state US (50 + Canada + Mexico + Airstrip One - California [it finally sank]). In the future, the six trillion dollars barely buys a sandwich, but if they invest it several thousand years ago, they'll be rich! Unfortunately, the time traveler who was supposed to invest the money got distracted chasing after a bunch of loonies who were just trying to let all the animals out of the zoo, and the money ended up in the hands of the mob.

        Hey, it makes more sense than any theory from those Divine Cosmos people.

    • by Sycraft-fu (314770) on Saturday February 18, 2012 @01:24AM (#39083233)

      Seriously, that is the dumbest conspiracy theory I've seen. The fact aside all the truther bullshit of "9/11 was an inside job" there's no way the bonds were real on account of the amount. In 1940 the US debt was only about $43 billion dollars (the GDP was only $97 billion). So there weren't $6 trillion of bonds floating around. The debt didn't hit the $6 trillion mark until late 2002 (the GDP was about $10 trillion). However, dates of the bonds aside, the treasury doesn't issue physical notes anymore. They are all just electronic entries in a database. Far more convenient, secure, and trackable.

      Might want to lay off the conspiracy sites. Here's a hint: If someone starts going on about 9/11 being an inside job, they are a conspiracy nut.

      • yeah, and conspiracy theorists think you're the crazy one when you don't buy into their wild ideas. It can *drive* you crazy.
        though ZeroHedge is nothing compared to some of the stuff I've read.

      • The conspiracy theory is not what is interesting. It is the photos of these boxes and their contents that have been on the Internet for years now. The question Zero Hedge raises is why would they go through the trouble of creating counterfeit boxes? You can't cash the boxes, only the bonds.

        .
        It would be interesting to have independent scientific authentication on the boxes and their contents. Then, if they happen to originate in 1934, try to discover the story around them. Otherwise, if science proves

        • Remember that's what they are trying to do. However the boxes are fake. How can you tell? Easy: The flag. The stars are staggered, not ordered. From 1912 to 1959 the US flag had 48 stars, which were in 6 rows of 8 stars, all on a nice ordered grid. The staggered flag we see now didn't come until later. Our current 50 star flag was in 1960. There were earlier staggered flags, but not in the same 6-5 configuration.

          Then there's the fact that it has like 25 stripes. The flag has always had 13 stripes.

          This was a

          • by durrr (1316311)
            Or some subgroup of the US government actually discreetly made those bonds, in a hush-hush but valid manner, traded them for a shitton of various valuables to some foreign instance. But their ridiculous face value and general invisibility means they can easily claim they are forgeries.

            But of course no government would ever do that now would they? Because being government they are per definition on moral highground and would never do something malicious or fraudulent to further the agenda of their own per
        • by SmallFurryCreature (593017) on Saturday February 18, 2012 @09:18AM (#39084835) Journal

          A few years ago two old forgers, father and son, were caught. They did masterful work but their real master stroke was in authenticating the items. How do you proof something is yours and is legit? Well, you shows that you, or rather, someone long death in your family, bought it legit at an auction.

          How? They used an old and real auction catalog, pointed to an item description that was similar to the item they had forged and went with a story like my father bought this item here, what do you think it is worth if we wanted to sell it? It worked wonders. The documents were 100% legit and therefor in no doubt, they just weren't related.

          If you want to sell these bonds, you have to come up with a convincing story of why you have trillions worth of bonds. You don't just dump them in a shopping bag and get payed. A scam is about the details and a period container complete with dust is a nice detail.

          Mind you, you would have to be bloody greedy to believe such a scam but there are plenty of greedy people on the planet.

      • by quantaman (517394)

        There's also the part where WWI was planned by freemasonry...

        Though I do feel reassured that my BS detector was going off even before I noticed all the other conspiracy theories showing up, I guess everything is still in working order.

        • Ya zerohedge has always got my antennae twitching but I've never read much of it, despite people's love for linking it here and not been enough of an expert to really judge what he's saying.

          However this here shows that as is so often the case it is just another random Internet conspiracy nut that people have latched on to.

      • by X.25 (255792)

        Might want to lay off the conspiracy sites. Here's a hint: If someone starts going on about 9/11 being an inside job, they are a conspiracy nut.

        What I am actually enjoying is seeing so many 'conspiracy theories' from past 20 years turning out not to be conspiracy theories at all.

        But blind mediocre nuts will just keep calling anything they don't like a "conspiracy theory".

        • But blind mediocre nuts will just keep calling anything they don't like a "conspiracy theory".

          I don't like watermelons but it's not because of the conspiracy theories they promolgate.

      • Not to defend Zero Hedge or "truthers", but if you assume that the wikipedia definition of conspiracy theory [wikipedia.org] is accurate, the official version is just that: a conspiracy theory.

        A conspiracy theory explains an event as being the result of an alleged plot by a covert group or organization

  • Duh! (Score:5, Funny)

    by Guppy06 (410832) on Saturday February 18, 2012 @01:11AM (#39083159)

    Everyone knows the real ones are in China!

    • by metlin (258108)

      ...and Japan.

      • by jd2112 (1535857)
        Japan is in worse financial condition than the US. They probably sold off any they had to China or some other country years ago.
        • Re:Duh! (Score:4, Informative)

          by nedlohs (1335013) on Saturday February 18, 2012 @02:34AM (#39083487)

          No they didn't, in fact they increased their holdings significnantly (by almost 20%) in 2011 - almost taking back the top holder spot from China (China held 5% more) at the end of the year.

          But don't let facts get in the way of your fantasies about the financial condition of Japan. Of course better to pick facts that aren't quite so published.

        • Re:Duh! (Score:5, Informative)

          by metlin (258108) on Saturday February 18, 2012 @04:01AM (#39083789) Journal

          Slashdot, where people's knowledge of technology is only surpassed by their knowledge and understanding of of economics.

          But here you go: major foreign holders of treasury securities [treasury.gov]. Holdings at the end of Dec 2011:

          China: 1100.7B USD
          Japan: 1042.4B USD

          And oh, here's the data on the Japanese GDP since 1960 [google.com].

          FYI, it's grown from 4.6674T USD in 2000 to to 5.4588T USD in 2011. Sure, it fell for a while from the high of 5.2644T USD in 1995, but to state that their economy is not performing well only shows your stupidity.

          • What is your definition of "economy performing well"?

          • by Anonymous Coward

            Bzzt. The Google GDP numbers are not corrected for inflation, which means the Japanese economy has been either flat or slowly declining depending on the year you compare from. This is commonly known as their lost (two) decade(s). Japan is NOT in shape and hasn't been for a long time now, it's just that in a race to the bottom they don't stand out when the numbers are massaged just right (or enough new debt is taken on to paper things over at least until the next bureaucrat has to deal with them, who more th

            • by microbox (704317)
              The Japanese economy is doing fine when you consider that they made a self-conscious decision to stop growing the population. While the inflation corrected GDP shows only tiny year-on-year growth, there economy is booming when you measure wealth in other ways: technological penetration, education, life expectancy, ... you know, all the important stuff.

              Japan faulted under a ridiculous property market boom and bust, and now they are going steady.
        • by microbox (704317)

          Japan is in worse financial condition...

          You should read about the myth of Japan's failure [nytimes.com].

  • by Kaenneth (82978) on Saturday February 18, 2012 @01:12AM (#39083169) Homepage Journal

    I would guess the planned scam (Including the Nigerian connection) would be sending spam e-mails, etc. saying "as a nigerian prince, I inherited this billion dollar certificate. I just need a loan of $10,000 to pay for security, transport, etc. to have it redeemed, then you'll get $100,000 back..."

    The certificates themselves would never be 'redeemed' just used to bait greedy people into getting scammed.

    • I'm pretty sure the letter to Nigerians, written from someone trying get their money back, promised trillions of dollars in bonds to be paid as soon as a small deposit of plutonium was deposited to help pay a lawyer who could sign over the bonds.
  • by guttentag (313541) on Saturday February 18, 2012 @01:12AM (#39083175) Journal

    The probe focusing upon money laundering has also include financial dealings alleged to direct money to Nigerian sources to buy plutonium. Sound like a movie plot, yet? $6 Trillion, that's a lot of lettuce."

    OK, it's the Libyans who want plutonium and used pinball machine parts, and you only need a couple heads of lettuce to generate 1.21 gigawatts of electricity with Mr. Fusion, not 6 exa-heads of lettuce. Get your Back To The Future quotes straight!

    • Re:Movie Plot? (Score:4, Informative)

      by Bill Currie (487) on Saturday February 18, 2012 @02:14AM (#39083405) Homepage

      Discharge a AA nicad batery (~1200mAh) in 4.3 miscroseconds, and you have 1.2GW, so a few lettuce leaves poses no problem. Now, getting a GJ would take a few head of letuce.

      • by tibit (1762298)

        Wait a minizel, informafuckingwhat?

        That AA battery is a strawman like nobody's business. What you're claiming is that if you take about 5000J of energy and transfer it in 4.3us, you need the average power level of 1.2GW. That's very clever of you, but this is kinda middle school physics and I'm not impressed unless you're in middle school. But since you tossed in a physical object, rather than just numbers in some pupil's workbook, let's be real, mmmkay?

        The middle school pupil would, obviously enough, claim

        • Let's forget about the self-resistance and thermal capacity of a real AA nicad, or even about whatever circuit you use to do the discharge. Let's just focus on the fact that the damn thing has rolled electrodes and will have some real-life inductance.

          Way to miss the point, dude. The GP was pointing out that Back to the Future's concept that it takes 1.21 GW to perform a time-travel trip is flawed in that it's a unit of power not energy. For how long does the flux capacitor need to draw 1.21 GW is important information. If it doesn't really need that much energy, then a few heads of lettuce would be plenty, as long as you have some system to store the energy you produce from that lettuce and then release it extremely quickly. Which, if you accept that

  • by Shoten (260439) on Saturday February 18, 2012 @01:25AM (#39083239)

    (Okay, I originally typed this in all caps...because it's funnier that way...but Slashdot's code doesn't permit it.)

    I am the widow of A.Q. Khan from Pakistan. I am contacting you in good faith because I know you are a good person and will help me. I need your help in moving $6 trillion worth of plutonium out of the country. In exchange, you will receive a ten percent commission...

    • I am the widow of A.Q. Khan from Pakistan. I am contacting you in good faith because I know you are a good person and will help me. I need your help in moving $6 trillion worth of plutonium out of the country. In exchange, you will receive a ten percent commission...

      Shouldn't that be "In exchange, you will receive some polonium."?

  • by tlambert (566799) on Saturday February 18, 2012 @01:40AM (#39083291)

    Pretend they are real and pay down the US debt?

    -- Terry

    • Pretend they are real and pay down the US debt?

      -- Terry

      Works for the US Government.

    • by artor3 (1344997)

      Bonds are basically IOUs from the government. So you're suggesting that we pay our debts with IOUs.

      Trust me, Washington is waaay ahead of you.

      • by aevan (903814)
        But you see...the US owes 15 trillion, and the bonds are for 6 trillion...

        ...so I give the US the 6 trillion bond, forgive them the 6 trillion, they apply it to the 15 trillion and voila~ six and six is twelve against fifteen...

        ...now the US only owes 3 trillion!
    • If we pretend they are real then they would be PART of the US debt. The US debt IS treasury bonds.

      • by janimal (172428)

        Good point. In order for US to redeem these bonds, they would have to use them to pay back some sucker holding the real bonds and convince him/her that he/she doesn't need to redeem the new bona fide 1934 $1B ones, since they're now collector's items and will be worth far more in 30 years.

    • by matunos (1587263)

      Pay down the US debt with US debt? That sounds as useful as putting a portable hole inside a bag of holding.

  • I am a Nigerian widow who just inherited $6,000,000,000,000.00 from my late husband, and I need help getting it out of my country.

    etc.

  • it's only 6 bills Mr. Burns used have one now it's in cuba

  • If true, this is the more interesting fact in the news. Unless one assumes, of course, that it is an exchange of fake plutonium for fake bonds. Ah, Nigeria-- a banana peel Republic economy.

  • Didn't Dr. Evil demand that kind of money back in 1960 and it didn't exist yet?

  • It's a shame they seized this. It would have been so much more fun to actually have these con guys con other con people with the bonds before arresting them all.
  • ... that the MAFIAA was against counterfeiting?
  • It's that roman_mir guy isn't it? Trying to destabilise the Fed from his secret Swiss base.

  • First off, does Nigeria have Plutonium? Or just Uranium.
    Secondly, Mafia is not building nukes. So, who were they obtaining Pu/U for? Obviously, they want to sell this on the black market, but who is buying? The only nations that I can think of would be North Korea, Burma, and Iran.
    Of those, Iran is the likely suspect. If Iran is buying Pu on the black market, that says a lot. Basically, it means that they are trying hard to move their timeline up. The reason is that right now, they are breeding it in th
    • First off, does Nigeria have Plutonium? Or just Uranium.

      AFAIK, neither, but it does have yellow-cake.

      • That was my thinking as well. Unless they bought Pu on the black market somewhere. Regardless, that means processing, which few nations have.
  • This is a very clever scheme by Obama and CIA. Now Obama can claim ALL outstanding US Govt bond were fakes, forgeries and scams, and he has already paid off all the legitimate US Bonds. That news will hit the market on Oct 22, 2012. After the steadily improving economic picture, falling unemployment rates, killing Osama, the news that USA is debt free would be the final nail in the coffin. Obama will sweep all 50 states, and Democrats will win all the houses and senate of all the states, governorships too.

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